How to Offer Free Shipping: 14 Strategies for Higher Sales

Offering free shipping to customers is a consideration that’s become a must. Statistics show that it’s a top priority for 81% of consumers that shop online, and as a key part of your e-commerce logistics strategy, free shipping helps differentiate you from competitors, generate long-term customer loyalty, and supports business growth and stability. Plus, when you offer free shipping, the potential to drastically increase your average sale skyrockets. Here’s how to offer free shipping for your business, including 14 strategic tactics, how to calculate your minimum cart value, and how to incorporate consumer behaviour trends in your shipping strategy.

Key takeaways

What is free shipping?

Free shipping is a valuable marketing and sales tactic where the expense of delivering the product is absorbed by the retailer, often by bundling it into the cost or through minimum order thresholds.

Types of free shipping

There are several different types of free shipping to choose from. Which one works best for you will vary depending on your business.

Unrestricted

All customers receive free shipping, regardless of the product selected or cart value. This removes friction to increase sales and boost conversions, while encouraging impulse purchases and heightening the value of your product.

Condition restricted (minimum purchase, region, items)

This restricts free shipping to customers that meet certain criteria, such as minimum purchase value, region, or items. This is one of the most popular methods that can help increase your average order value (AOV) and preserve your profit margins.

Members-only

Requires customers to be a member or part of a loyalty program to access free shipping. This tactic boosts urgency and scarcity, which increases your product and brand value, resulting in return purchases and enhanced brand loyalty.

Promotional

Occurs during time-limited windows, such as surges in demand like holiday shopping, or within certain conditions, such as through an exclusive promo code accessed via a newsletter. This tactic decreases the decision window for purchases and cart abandonment, while boosting your competitive advantage.

Rolled into product cost

Free shipping is included in the item cost, so the expense is absorbed by the customer rather than the retailer. This requires you to calculate the right product cost that takes this expense into account. However, it gives you more revenue and profit margin predictability.

How does free shipping work?

For most businesses, free shipping is made available to customers by recovering the cost elsewhere. How you choose to offer free shipping to your customers will commonly go one of two ways:

Customer takes on cost (ie built into product price)

Before you go this route, you will need to calculate your profit margins to know the markup for your item cost so you’re not sacrificing your profits with your free shipping. Be sure to factor in all other operating expenses such as marketing, domain costs, shipping materials, and more.

Retailer takes on cost (ie minimum order value)

To use this method, you will need to calculate your free shipping threshold, so you know what minimum order value will make your customers eligible for free shipping.

How to calculate your free shipping threshold

Calculate your Average Order Value (AOV, do not include shipping expenses) (e.g. $20)
Use a shipping formula to calculate your shipping costs (e.g. $12)
Calculate your Gross Profit Margin using the formula below:
(Total sales – Cost of producing product) / Total salesE.g.
Total sales – $100K
Cost of product – $50K($100K – 50K)/$100K = 0.5 (x100) = 50% Gross Profit Margin
Estimate a possible minimum order value. This will dictate your free shipping threshold. Ideally, start at least 30% above your average order value.

Test your minimum order value

Calculate the difference between your estimated minimum order value (e.g. $30) and your average order value (e.g. $20).
$30-$20 = $10
Multiply this value against your Gross Profit Margin.
$10 x .5 = $5
Subtract this cost from your shipping costs
$12 – $5 = $7

This value means that your business will have to absorb $7 in additional cost per qualifying orders. This value is still too high, so you’ll have to adjust your minimum order value accordingly to hit the sweet spot that works for your business.

In this case, $40 is the ideal minimum order value, since it yields only a $2 additional cost for the retailer.

Does free shipping increase sales?

Yes, free shipping increases sales and is a key driver for 42% of consumers’ purchases, boosting conversions for retailers by reducing cart abandonment, encouraging urgency of purchase through immediacy, and heightening purchase intent. Plus, it’s one of the key retail e-commerce shipping strategies to boost your revenue and reach.

Why is free shipping worth it for businesses?

Free shipping is well worth the investment. Here are the 5 key benefits it can bring to your business.

1. Higher average order value

Customers are more likely to purchase more when incentivized with a free shipping offer. In fact, for 93% of customers, this is their main goal. This increases your average order value, which boosts your profits.

2. Boosts customer loyalty and cart checkout

82% of consumers are more likely to complete their purchase if your business offers free shipping. Plus, it positions your business as generous and customer-focused and encourages repeat purchases.

3. Heightens customer satisfaction and experience

Free and fast is the norm and minimum for consumers, and this is especially the case for Gen-Z, which is becoming the generation with the strongest purchasing power (McKinsey State of the Consumer 2025). Free shipping helps you meet customer expectations, and removes friction to provide a memorable experience that will keep your customers returning and sharing their great finds with others.

4. Increases customer base

Use free shipping as a reward to emphasize word-of-mouth and to get your customers to share positive experiences with your business on social media. Currently, social media is only a high point of trust for consumers to interact with their friends and family, who are their most trusted sources of information (McKinsey State of Consumers 2025). Offering an exclusive free shipping code to customers can help you better leverage this platform authentically, while increasing sales and growing your customers.

5. Increases purchase intent

Free shipping gives customers the perception of getting additional value and increases purchase intent through the endowment effect and loss aversion. Customers feel like they already have the item (the endowment effect) and are more likely to complete their purchase because they don’t want to lose it (loss aversion).

How to offer free shipping for your business: 14 strategies to boost revenue

There are many ways your business can choose to offer free shipping. Here are the 14 top customer-centric strategies to maximize your profits.

1. Offer free shipping on select items

Add free shipping to new arrivals or use data analytics to identify high-desirability items that capitalize on the trends, interests and wants of your ideal customer profile. You can also offer free shipping on merchandise such as:

Overstocked items
Higher-margin items
Items that cost very little to ship

Consider promoting a deal of the day or week and offering free shipping for specific items to get customers into the habit of returning to the site to check out what the next deal is.

2. Specify minimum purchase for free shipping

How your business decides to offer free shipping hinges on your minimum order amount, which helps increase your average order value and your profit margins so your business is better positioned to offer free shipping for the long run. Help your customers meet the minimum by providing up-sell and cross-sell options (e.g. suggest products that are often purchased with the item in their cart).

You can calculate your free shipping threshold using the formula above, but generally your minimum order requirement is at least 30% higher than your average order value.

When customers order multiple items, try to consolidate your shipments to save on shipping costs. We share order consolidation tips in our 6 Easy Ways to Save Big on Shipping Costs article.

3. Consider strategic timing

If you’re still unsure how to offer free shipping for your business, remember that it doesn’t have to be year-round if it’s not a cost-effective strategy. The holidays are a fantastic time to draw in price-conscious shoppers, encouraging them to buy more online during peak season sales periods. By providing a time frame limit, you can get a sense of how much an offer of free shipping boosts your overall sales when you compare them year over year.

4. Add luxury to the experience of your products

For products that qualify for free shipping, encourage cashout to meet your free shipping threshold with a visual or experiential appeal in the packaging or opening experience. You can even add this to high-demand products to elevate their appeal. Customers are more likely to splurge on beautiful or desirable products. This is especially true for Gen-Z (McKinsey, 2025). Packaging, marketing, and appearance can help drive higher likelihood for your customers to cash in on free shipping and spend more at your store.

Learn how to deliver a luxury experience with your shipping with these best practices. Read more.

5. Restrict free shipping to certain regions

Here’s how to offer shipping by offering it to certain postal codes or countries:

Capitalize on local support by restricting it to specific regions: 47% of shoppers worldwide favour locality in final purchasing decisions. Capitalize on this preference by only offering free shipping to your city or province. It adds value in the eyes of the consumer and also helps reduce the cost of shipping for your business.
Use data to identify high volume areas of purchase: Use customer data to identify regions with high sales or high density of repeat or large volume purchases, where you can offer a reasonable minimum cart value alongside shipping rates that won’t cut into your profit margins.

Finally, look for the right shipping logistics provider that can help support your regional free shipping. For example, Purolator offers several solutions to support businesses including a wide network of regional hubs and local access points like Quick Stop Kiosks and Parcel Lockers, partner retail access centres, and more.

6. Use gamification

Use gamification and offer free shipping as an incentive or reward to boost customer loyalty and engagement, which increases your average order value. You can use this strategy by encouraging customers to get free shipping by:

Joining your referral program
Sharing photos on social media
Signing up for your newsletter
Participating in your a loyalty program

As an added bonus, if you have a brick and mortar store, gamification can also encourage in-store shopping to discover new products or interact with your brand in ways.

7. Minimize your packaging

Minimizing your packaging is a great way to reduce expenses at every step of the order fulfillment process, while maintaining a quality experience for the customer. Plus, with the rise of ethics-driven consumption, it’s also effective for promoting sustainability in your business and attracting more customers.

Minimal packaging isn’t just a sustainability practice. For most carriers, charging by dimensional weight is the status quo. You can reduce the impact on your bottom line by optimizing your free shipping packaging according to dimension weight rules by either:

Ensuring your packaging is compact by using parcels that are just the right size.
Placing items from the same order in a single parcel where possible.

With these best practices, free shipping becomes that much more affordable. To learn more about proper packaging, see our infographic on the dos and don’ts of packaging.

Ready to make your packaging more eco-friendly? Learn 3 best practices here. Read more here.

8. Leverage regional fulfillment centres

When you begin to offer free shipping, you can expect your order volume to increase. How can you keep up with these orders without breaking the bank on delivery costs?

Carriers factor the distance your package travels when they calculate your shipping rates. One way you can lower this fee is by adding fulfillment centres to your supply chain. Store your popular products in warehouses located closer to your customers so that when it’s time to deliver, you reduce the distance charges and the cost of free shipping.

Look for the right shipping order fulfilment partner, such as Purolator, to help with your inventory management and orders, including reporting, forecasting, and planning so your business is set up for growth.

9. Make it for members only

Offering perks such as free shipping through a membership program can boost customer satisfaction as a year-round benefit for paying an annual fee. It will also make them more inclined to capitalize on free shipping with repeat purchasing.

Here’s how to offer free shipping through a membership program:

Offering free shipping on specific items for a monthly premium.
An annual membership fee for access to exclusive offers including free shipping.
A tiered membership system where customers gain the exclusive perk of free shipping after spending a certain amount (e.g. $500 or more) per year or on a single purchase.

Membership programs are great for retaining customers and growing your business because they increase engagement and customer stickiness through incremental value over a long period of time.

10. Use customer segmentation

You can offer free shipping to high-value customers to maximize your revenue and profits. Understanding your best customer segments for free shipping can also help you improve and adjust your marketing, product selection, and market differentiation. This can help grow your customer base, improve your pipeline and overall customer satisfaction.

Use data analytics and market research to identify where you’re experiencing the most growth and revenue and help segment your customers. You can then create personalized campaigns for free shipping offers to attract these customers based on data about their spending history, long-term loyalty, or locale.

11. Extend delivery timing for free shipping

Customers are willing to wait longer if they receive free deliveries. In fact, 90% of shoppers are happy to wait 2-3 days for deliveries with free shipping with rural areas willing to wait 7+ days for their free delivered shipment. Take advantage of this by selecting shipping services, such as ground transportation delivery services, that bring savings without sacrificing speed. This is especially the case with a delivery provider with a large courier network, such as Purolator, where ground deliveries can be as quick as a few days.

12. Pair with convenience and added visibility

Add additional value to your free shipping with features like Purolator Your Way, that add visibility and flexibility such as end-to-end tracking, virtual signature release, and photo proof of delivery. By providing these features, you’re building trust with your customers and providing convenience that adds value, which promotes customer loyalty and return purchases.

Create a more personalized delivery experience with Purolator Your Way. Learn more.

13. Leverage shipping partner discounts and offers

You can reduce the impact of free shipping on your profit margins by partnering with a shipping logistics company that provides discounts and offers, and solutions that understand your customer and support the long-term sustainability of your business.

When selecting a logistics partner, consider questions like:

Do they have experience in my industry?
How large is their network?
Do they offer personalized shipping solutions?
Does their pricing structure align with your growth?
And more.

Learn more about how to choose the right shipping order fulfillment partner here.

14. Make use of local pickup and convenient delivery options

Leverage local support with free pickup to help reduce costs for you and to add convenience to your customers. Use pickup parcel lockers, hubs, and curbside pickup to provide free shipping alternatives without the same level of cost associated with rates for individual shipping.

5 tips for offering free shipping as a small businesses

If you’re a small business, free shipping comes with specific considerations due to your finances and resources, your market size, and more. Here are 5 strategies to keep in mind as you offer free shipping.

Bundle pricing: Incorporate your free shipping into the product cost or pair items together to be valid for free shipping, such as high-demand products with low-demand items.
Minimize other expenses: Offset the impact of free shipping on your business costs by reducing expenses through software automation, energy-efficient strategies, funding opportunities like the Purolator True North Small Business Grant Contest, and more.
Small business discounts: Look for small business discounts that can help reduce your shipping expense without sacrificing your reach or quality and breadth of service. For example, Purolator offers exclusive small business discounts and perks as well as contests, promotions, and grant opportunities. Learn more here.
Use order consolidation: When a single customer has multiple orders or several customers order from the same region, use order consolidation to reduce shipping costs by minimizing shipping material, decreasing manpower and drop-off points, reducing your environmental impact and lowering order risk. Here are 6 easy ways to save big on shipping costs.
Offer free returns: As a small business, every customer interaction counts. Free returns drive customer satisfaction and increase conversions by driving customer loyalty and trust, which encourages future customer purchases. Take time to select the right returns management logistics partner, like Purolator, since the reliability of their service will be a direct reflection of your business. Look for service options that include:
– Express and Ground shipping
– QR code returns service
– Package free returns
– And more

Learn about the power of resilience and how it can make your small business stronger. Watch the webinar here.

When should I offer free shipping?

Here are the 3 ideal times that signal when you should begin offering free shipping as a business.

1. When you are experiencing peak seasons

Use your historic sales data to identify surges in customer purchases, based on product seasonality or annual holiday events such as Boxing Day. Add a time frame to add a sense of urgency, such as offering free shipping within certain dates such as the week before Christmas.

2. When you can segment customers

You can offer free shipping when you’ve had enough sales that you can clearly identify information about your customers to create an ideal customer profile. This includes data such as:

Who makes repeat purchases or purchases over a certain threshold
Trends in customer behaviour like their favourite products and popular purchasing times
Demographics like location, average age, and interests

3. When you can identify low- and high-selling products

You can use free shipping as a strategy to move low-selling products by bundling them with high-desirability items that automatically give customers free shipping. This encourages customers to purchase more and lets you get rid of old stock.

How to create your free shipping policy

A free shipping policy helps your business build customer trust and retention through transparency and sets customer expectations. Your shipping policy should cover:

1. Service levels and expected timeline for delivery

Specify how long deliveries will take depending on a customer’s region (e.g. 2-3 business days) and which service levels apply to orders eligible for free shipping (e.g. Express or Next Day).

2. Items that qualify

If your free shipping policy is product-specific, provide any rules or information about what is eligible for free shipping and what information indicates it is eligible, such as a red star on the product page or a [FREE SHIPPING] logo on the product image.

3. Minimum purchase amount

Provide the minimum cart value that makes an order qualify for free shipping. This amount may vary depending on the region or country or the time of year, so make this information explicit in your policy.

4. Restrictions and exclusions

It’s important to communicate which scenarios exclude or restrict free shipping offers, such as combining them with existing promotional offers or discounts. You may also only offer free shipping to certain areas, which excludes other countries or postal codes.

5. Returns

Include information about your return policy, including conditions for the return, how to make a return, local drop-off points, returns for damaged items or items with issues, exceptions and non-returnable products.

Learn 5 key e-commerce fulfillment and shipping strategies to boost your ROI and customer satisfaction. Read more here.

How to communicate free shipping to your customers

Whether you decide to offer free shipping across your site or for a limited time only, it’s time to get your customers excited. Here are 7 ways to generate buzz for your free shipping:

TIP: Before you begin promoting your free shipping, make sure your website is optimized, which means reviewing product pages for missing or incorrect information, checking imaging sizes to reduce load time, and optimizing it for mobile.

1. Social media

Target repeat customers on social media for your free shipping ad campaigns and link directly to the page, a tactic that over a third of Canadian customers respond to. Encourage organic shares after a customer receives their free shipped order by offering an exclusive discount code, and by beautifying your packaging and opening experience on products eligible for free shipping.

2. Email

Offer newsletter subscribers exclusive early access to free shipping promotions or advertise hot ticket items that will be eligible for free shipping for a limited time. Use personalization where possible, since Canadian shoppers are more influenced by customized emails than their global counterparts.

3. SMS/text

For customers who have consented to text promotions, communicate free shipping windows or offers with engaging messages and easy, quick links. Make sure you keep the copy short with a clear call-to-action (CTA) like “Shop Now”, and send them at the right time such as during lunch breaks.

4. Announcement banners

Place a sticky “free shipping” banner at the top of your website for all pages, including the checkout window. Automatically apply free shipping to orders during checkout so customers can see how much they’re saving, to emphasize the value they’re getting.

5. Cart nudges

Notify customers when they’re close to the free shipping threshold. Apply a free shipping bar at the top of your checkout screen that gives customers a visualization of how close they are to getting free shipping. Provide item suggestions that can help get their cart to the right minimum order value.

6. Pop-ups

If your free shipping is an exclusive offer, such as to any order size for new customers, include a popup to notify new visitors as soon as they land on your site. Include a link to your shipping policy and encourage them to sign up to your newsletter to receive their code.

7. Inserts

If there’s a free shipping window coming up, include an insert that advertises this upcoming offer. This is a great tactic for holiday seasons and specific customer segments. If you’re targeting specific customer groups, use language that communicates urgency and exclusivity such as: “An exclusive offer for you, enjoy free shipping on us for your next order. Valid until [DATE i.e. end of next month].”

5 shipping strategies to meet consumer expectations

No matter how you decide to offer free shipping for your business, here are 5 top strategies to keep in mind according to McKinsey’s State of the Consumer, to help optimize your shipping services to better meet trends in consumer expectations.

Learn key shipping trends and tactics to prepare your business for peak season and longevity. Read more here.

1. Focus on providing immediacy and convenience.

Offer fast shipping when you can’t offer free. For many consumers, immediacy has a price tag that they are willing to pay. Use services like Purolator’s Next Day or Express shipping where possible and local pickup within a short time frame window (e.g. 2-3 hours) to retain customers that aren’t willing to meet your minimum order threshold for free shipping.

2. Promote the locality of your business to local consumers.

61% of Canadian consumers place a high importance on locality when they’re making a purchasing decision (as of Q2 2025). Attract more customers by emphasizing your business’s region or country by using strategies like using local materials and tailoring products to regional preferences.

3. Focus on shipping services that add value.

Optimize your shipping services by offering real value to your customers, who are becoming increasingly strategic and choosy about where they spend their dollars. On top of discounts and offers, streamline your shipping services to include heightened transparency, visibility, and convenience with services such customized delivery services like Purolator Your Way.

4. Prioritize sustainability

Gen-Z’s growing purchasing power includes an 81% shift towards ethical consumption, which includes prioritizing sustainability. Position your business by adopting practical sustainability in your shipping and day-to-day, and looking for a shipping partner like Purolator that integrates eco-friendly practices into all levels of the company, passing those benefits to your business.

5. Provide a free and easy returns process.

Delivery experiences continue to drive customer loyalty, which includes a free returns or simplified returns process. According to Forbes, 44% of consumers are less likely to shop with brands that have complicated return processes, and a staggering 66% of businesses do not offer free returns. Partner with a logistics provider like Purolator, that can help you adopt a simple and easy returns management process customized to your business.

How to offer free shipping with Purolator

With Purolator, providing free shipping to your customers means getting the added benefit of features and services that position your business towards growth. Purolator offers the right expertise that makes adding free shipping easy, including supporting an intersectional shipping strategy that considers all aspects of your business, from sustainability to returns management to customer experience and loyalty.

Purolator’s services include:

Reliable service for peak or holiday seasons
Widest reach in Canada, covering 100% of postal codes
The only courier in Canada to the most time guaranteed options for Express and Ground delivery services
Largest number of operational terminals in Canada
Right expertise and services to support omnichannel strategy
Longstanding commitment to environmental sustainability, including the electrification of 60% of last-mile delivery vehicles and diverting 79% of waste from landfills.
Wide network of regional fulfillment centres, including local pickup and lockers
Exclusive discounts and offers, including our business rewards program
Shipping services with features for added convenience and visibility

Growing your business with a free shipping strategy

As part of your logistics strategy, free shipping benefits your growth and resilience for the future, especially when paired with services and tactics that leverage trends in consumer behaviour. As customers face greater access and choice, picking the right logistics provider, like Purolator, can be pivotal in differentiating your business from the competition and adding unique value to your products and services.

Purolator is a shipping partner that grows with you, enabling your success with the reach, experience, reliability, and customer-focus to help support your business. With a celebrated track record helping Canadian businesses navigate, anticipate, and prepare for the future, Purolator is a leader in supporting more strategic planning and operations for your business to expand and grow.

Ready to make an impact with your free shipping strategy? Save on shipments with these exclusive deals.

Learn more